Quite simply, the city/County is NOT in the arena management business, they have no residing expertise in that area, and thus they are smart to stay out of it.
Same thing as the cafeteria business in public buildings. The government has zero expertise in food business management, so it hires a contractor to run the business, pay a royalty or "rent" (oftentimes pre-qualifying bidders and then competing them and selecting on highest annual royalty or "rent" bid), and the contractor gets to keep the profit (or losses) from operating the business on government property. The arena is EXACTLY the same deal, albeit with bigger dollars to run that business.
Military bases are now trending toward contract operations of all facilities, which those contractors typically do not own but HAVE in some locations, since the overall price tag using expert operations staff can be a lot lower than using government employees (and/or owning the facilities). There are numerous examples of the government doing deals which parallel the new arena deal on the table at present.
The government could in no way negotiate a "piece of the action" from running everything without running it themselves and accepting their share of the losses, should they occur. They're NOT equipped to do this and they in no way want to have an uncertain major line item that could be red at the end of the fiscal year. No way. To accomplish what Weintraub sophomorically tosses out there, they would have to hire an outside contractor with the expertise, and then we are back to where we started with just one more player involved. Instead of the Maloofs being the arena ops contractor, another party would assume that role. And do you think a 3rd party would not want a share of the pie (like the Maloofs)? Do you think the government would accept losses generated by this 3rd party operator?
Dream on, Weintraub.
You have absolutely no idea what you are talking about, sir. This topic is well beyond your abilities.
A final thing that HAS to be considered but perhaps not a point that Arena supporters would want to center upon is that the Maloofs would never accept a deal with another entity operating the arena. Too much loss of creative control, especially if they don't like what another operator is doing at the facility where their team plays NBA ball, as well as the opportunity to make some money, perhaps very good money. With other cities that would be clamoring to get the Kings if a move were announced, the Maloofs know that they can get a far better deal somewhere else than this hypothetical one. That has to be considered in negotiations...whether you like it or not, if someone else is offering a better deal, then you have to match that deal, or you lose. And you have to face the reality that by accepting such a loss, you are likely accepting similar losses with other arena deals/pro sports franchises in the future, UNTIL you change your tune. If a certain part of such deals makes up the typical landscape, then you have to deal with that as best you can and move on.
In the end, what our elected leaders REALLY want from this new arena, is the ancillary development, surrounding and regional spillover business growth, and revitalization and expansion of downtown and the economy. It wants the image of a world class city which will lead to more businesses wanting to relocate ops to the City/County.
Our wise leaders are gladly willing to let the Maloofs reap any potential benefits of running the arena itself, because they know that the area benefits of a new arena and keeping the Kings/Monarchs, too, are far greater.
Easy choice.
Same thing as the cafeteria business in public buildings. The government has zero expertise in food business management, so it hires a contractor to run the business, pay a royalty or "rent" (oftentimes pre-qualifying bidders and then competing them and selecting on highest annual royalty or "rent" bid), and the contractor gets to keep the profit (or losses) from operating the business on government property. The arena is EXACTLY the same deal, albeit with bigger dollars to run that business.
Military bases are now trending toward contract operations of all facilities, which those contractors typically do not own but HAVE in some locations, since the overall price tag using expert operations staff can be a lot lower than using government employees (and/or owning the facilities). There are numerous examples of the government doing deals which parallel the new arena deal on the table at present.
The government could in no way negotiate a "piece of the action" from running everything without running it themselves and accepting their share of the losses, should they occur. They're NOT equipped to do this and they in no way want to have an uncertain major line item that could be red at the end of the fiscal year. No way. To accomplish what Weintraub sophomorically tosses out there, they would have to hire an outside contractor with the expertise, and then we are back to where we started with just one more player involved. Instead of the Maloofs being the arena ops contractor, another party would assume that role. And do you think a 3rd party would not want a share of the pie (like the Maloofs)? Do you think the government would accept losses generated by this 3rd party operator?
Dream on, Weintraub.
You have absolutely no idea what you are talking about, sir. This topic is well beyond your abilities.
A final thing that HAS to be considered but perhaps not a point that Arena supporters would want to center upon is that the Maloofs would never accept a deal with another entity operating the arena. Too much loss of creative control, especially if they don't like what another operator is doing at the facility where their team plays NBA ball, as well as the opportunity to make some money, perhaps very good money. With other cities that would be clamoring to get the Kings if a move were announced, the Maloofs know that they can get a far better deal somewhere else than this hypothetical one. That has to be considered in negotiations...whether you like it or not, if someone else is offering a better deal, then you have to match that deal, or you lose. And you have to face the reality that by accepting such a loss, you are likely accepting similar losses with other arena deals/pro sports franchises in the future, UNTIL you change your tune. If a certain part of such deals makes up the typical landscape, then you have to deal with that as best you can and move on.
In the end, what our elected leaders REALLY want from this new arena, is the ancillary development, surrounding and regional spillover business growth, and revitalization and expansion of downtown and the economy. It wants the image of a world class city which will lead to more businesses wanting to relocate ops to the City/County.
Our wise leaders are gladly willing to let the Maloofs reap any potential benefits of running the arena itself, because they know that the area benefits of a new arena and keeping the Kings/Monarchs, too, are far greater.
Easy choice.
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